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zoopy's trading journal

  • #1,081
  • Jun 6, 2008 10:41pm Jun 6, 2008 10:41pm
Hi fellow turtle, hope its been a good euro week for you too.

Looks like our turtle head missed all the fun in Australia.
Still waters run deep
  • #1,082
  • Jun 7, 2008 7:14am Jun 7, 2008 7:14am
Quoting barak
Hi fellow turtle, hope its been a good euro week for you too.

Looks like our turtle head missed all the fun in Australia.
Hey Barak

This week was about a scratch for me on the euro. I managed to catch some of the move yesterday with a small position but earlier this week I was doing counter trend trading (I hope Jacko doesn't see this lol) and took a hit.

I've been busy testing out what I call "wave trading" using concepts that Jacko has in his method. This is more to teach me the rhythm of the market and when to look for pullbacks or when a pair has bottomed out.

btw. Notice how whenever Jacko goes on vacation the market makes insane moves? lol

Hope you had a good week.


zoopy
  • #1,083
  • Jun 7, 2008 7:54am Jun 7, 2008 7:54am
Quoting zoopy
Hey Barak

This week was about a scratch for me on the euro. I managed to catch some of the move yesterday with a small position but earlier this week I was doing counter trend trading (I hope Jacko doesn't see this lol) and took a hit.

I've been busy testing out what I call "wave trading" using concepts that Jacko has in his method. This is more to teach me the rhythm of the market and when to look for pullbacks or when a pair has bottomed out.

btw. Notice how whenever Jacko goes on vacation the market makes insane moves? lol

Hope you had a good week.


zoopy
Hi zoopy and Barak,

Great to see two turtles in one thread.

I have managed to capture the EURUSD rally from the very beginning. I think the reason why you didn't catch the move zoopy lies in the fact that you didn't stick to your plan. Hope you won't repeat this mistake again. I am not saying that I don't take counter-trend trades, but when I counter-trend then I risk around 0.5% compared to 3% while trending in direction of trend. But those 0.5% is not my true risk, the true risk becomes evident when you consider missed opportunities.

Cheers,

Fadetobla
  • #1,084
  • Jun 7, 2008 8:11am Jun 7, 2008 8:11am
Quoting Fadetobla
Hi zoopy and Barak,

Great to see two turtles in one thread.

I have managed to capture the EURUSD rally from the very beginning. I think the reason why you didn't catch the move zoopy lies in the fact that you didn't stick to your plan. Hope you won't repeat this mistake again. I am not saying that I don't take counter-trend trades, but when I counter-trend then I risk around 0.5% compared to 3% while trending in direction of trend. But those 0.5% is not my true risk, the true risk becomes evident when you consider missed opportunities.

Cheers,

Fadetobla
Fadetobla

If I was trading strictly Jacko's methodology then I would have entered in at 1.5400 because there was support there plus it's a round number. I also did stick to my plan since I'm testing waves and I WAS trading with the trend based on the 4 hour timeframe. What I did this week was definitely not a mistake. You have to read through the last few pages of my journal to see where I'm going with all this.

What I'm doing now isn't the same way Jacko trades. What I'm doing now is to understand why he trades the way he does and what makes his method profitable. It's also to prepare me for when the long term trend changes and this is where the approach I'm using now will detect it in it's earliest stages (if we were using the weekly chart). What I'm also doing now defines the parameters of trend trading so that when market conditions do change, I will know how far I can go when it comes to adjusting things like stops or trails if I decide to take that route.

With regards to counter trend trading, I agree in that one shouldn't do that (when waves break up, you should never sell, only buy). It just seems like I'm doing it now but if you analyze what I'm doing very carefully (based on the 4 hour timeframe) I'm actually following the trend based on the direction waves break so in essence it's not counter trend trading. It IS however counter trend trading based on his criteria and if you are using weekly trendlines which I'm not.

zoopy
  • #1,085
  • Jun 7, 2008 8:20am Jun 7, 2008 8:20am
Quoting zoopy
Fadetobla

If I was trading strictly Jacko's methodology then I would have entered in at 1.5400 because there was support there plus it's a round number. I also did stick to my plan since I'm testing waves and I WAS trading with the trend based on the 4 hour timeframe. What I did this week was definitely not a mistake. You have to read through the last few pages of my journal to see where I'm going with all this.

What I'm doing now isn't the same way Jacko trades. What I'm doing now is to understand why he trades the way he does and what makes his method profitable. It's also to prepare me for when the long term trend changes and this is where the approach I'm using now will detect it in it's earliest stages (if we were using the weekly chart). What I'm also doing now defines the parameters of trend trading so that when market conditions do change, I will know how far I can go when it comes to adjusting things like stops or trails if I decide to take that route.

With regards to counter trend trading, I agree in that one shouldn't do that (when waves break up, you should never sell, only buy). It just seems like I'm doing it now but if you analyze what I'm doing very carefully (based on the 4 hour timeframe) I'm actually following the trend based on the direction waves break so in essence it's not counter trend trading. It IS however counter trend trading based on his criteria and if you are using weekly trendlines which I'm not.

zoopy
Here's a follow up to the last post just to clarify my intentions with waves. If I was using the weekly chart, I would have been in since 1.4800. I would also be very bullish since the last set of waves to collapse came back in 2005.

I have included a weekly chart of 2005 showing a wave collapse. Having said this, based on my criteria, I would have been shorting for the whole of 2005 IF I was trading the weekly chart only. I believe Jacko was still taking longs during this time. Based on his criteria, if you were using trendlines, you should still have been bullish.
Attached Image(s) (click to enlarge)
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Click to Enlarge Name: eurusd_weeklywaves2005.gif Size: 11 KB
  • #1,086
  • Jun 7, 2008 9:17am Jun 7, 2008 9:17am
Been doing some thinking and analysis on the idea of scaling in vs all in. I did a write-up of this in my journal a while back (see link below).

http://www.forexfactory.com/showpost...&postcount=204

Because of an adjustment I've made where I wait for price to turn around and close, there is no need to use the "scout" anymore. The purpose of the smaller position was to find out where the top/bottom of the market was. Since I'm taking a simpler approach where I'm actually waiting for the market to turn around before moving in, there is no need to use the smaller position. Instead, I will now enter with a full position when I believe the market's momentum has changed. The change also makes things simpler and easier to follow.

Again... the above change is the way I'm doing it, others may trade it differently.
  • #1,087
  • Jun 7, 2008 9:27am Jun 7, 2008 9:27am
Hi zoopy,

Thank you very much for your feedback.

Before riding this rally from 1.5393 to 1.5769 (I am still in LONG), like you, I was facing a serious decision: especially after Bernanke's the H4 trend was (and is still) rather bearish. However, the overall weekly trend was bullish with a sign of bearishness at the end. I had to make a decision. By now I can say the decision was right, but if the price would have gone downwards, then I had my S/L at 1.5267. But to come back to the point, you are right. I can indeed see a sign of a shortrend which could last for a year.
  • #1,088
  • Jun 7, 2008 9:28am Jun 7, 2008 9:28am
Stops I'm still working on. I haven't come to a conclusion on this yet. However... I'm going to take note of two possible options I'm currently thinking of.

1. Since we're waiting for price to turn around and close, a 100 pip stop may be sufficient enough.
2. If I was to use a 100 pip stop and was proven wrong, an alternative could be to use the AH. Keep in mind if I know the direction based on how the waves break, chances are the AH will work as well. The AH only works when you're on the right side.

Will be getting back to this post as my wave trading develops. Don't have an answer for this one yet.
  • #1,089
  • Jun 7, 2008 9:42am Jun 7, 2008 9:42am
Quoting Fadetobla
Hi zoopy,

Thank you very much for your feedback.

Before riding this rally from 1.5393 to 1.5769 (I am still in LONG), like you, I was facing a serious decision: especially after Bernanke's the H4 trend was (and is still) rather bearish. However, the overall weekly trend was bullish with a sign of bearishness at the end. I had to make a decision. By now I can say the decision was right, but if the price would have gone downwards, then I had my S/L at 1.5267. But to come back to the point, you are right. I can indeed see a sign of a shortrend which could last for a year.
Fade

The trend on eurusd 4 hour was bearish until Thursday afternoon when it broke a wave upwards. That was the reason why I went long. I didn't document this in my journal (although I did mention my bias had changed to "buy") as it's more the thought process and developments that I'm focusing on.

Based on the following daily chart, we're on the borderline right now in breaking a wave to the upside. If this happens, this tells me there is a high probability of making waves going up which would also mean 1.6000 would become history and 1.6500 would be on the horizon. I'm definitely not shorting right now since we're making waves going up so my only objective is to buy on pullbacks or wave breaks to the upside on the 4 hour chart.

Also see the following I posted on June 5, 2008 4:08pm NY. Price didn't pull back on the Friday so that's why I went long with a small position. I was also prepared to buy at 1.5500.

http://www.forexfactory.com/showpost...postcount=1044
Attached Image (click to enlarge)
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  • #1,090
  • Jun 7, 2008 10:04am Jun 7, 2008 10:04am
Figured now would be a good opportunity to step back and look at my development as far as wave trading goes. This way I can see what may have been overlooked and what areas may need improvement or needs to be simplified further.

Direction of a trend (based on all timeframes)
When waves break up, only buy
When waves collapse, only sell

Entering into trades
Approach 1 (aggressive)
An entry on the wave break is the more aggressive approach. This entry also requires a larger stop so be mindful of that.

Approach 2 (conservative)
When you know the direction, enter on pullbacks. Wait for price to turn around first and close before entering.

I also use additional knowledge based on my round number analysis which can be found through the index in post#1.

Take profit
This is currently set at 100 pips. The reason for this is because big players have orders at round numbers so I'm using this as guidance.

Stops
* Still experimenting with this. Currently I'm using the previous wave's high/low as a reference point.

Something to clarify as well. I do not use trendlines, S/R lines (in the traditional sense), bars/candles, fib retracements (although sometimes I will refer to the 50.0%), PA, PPZ or indicators. The intent of wave trading is to "listen" to the market and to follow it.
  • #1,091
  • Jun 7, 2008 10:32am Jun 7, 2008 10:32am
Need to add this to my journal because I find this article very important and something I'm also coming to grips with. Read below...

One of the most common mistakes non-professionals make in trading is they believe market movement is pre-determined. No matter how easy it looks at times, with the technicals mirroring the fundamentals -- as happened this morning w/ the non-farm payroll and the technical sell signal immediately following in the US stock indices, and the buy trigger in GBPUSD and sell trigger in USDJPY an hour later-- market movements are not predetermined and we never know when a trade will be a nice winner or a small loss. Of course we always use stops, and we should never risk more than 2% of our risk capital, insuring losses are small. So if you ever hear yourself saying "this trade is a lock" lose the cockiness and remember your humility. Nothing is predetermined to the degree that 95% of the population thinks it is.

I found the above paragraph very true and well written. This also validates why I'm trading waves and looking into it with more interest. I use waves to determine the current direction only. I never really know how far the move may go or by how much, but what I do know is that there is a high probability price will go up/down depending on how waves break (keep in mind I'm saying high probability not 100% guaranteed). This is also the reason why I have decided to not hold onto trades to "see how far price can go" because the market can be very unpredictable at times. Instead I take 100 pips profit based on how orders are stacked up at round numbers and once I have my profit, I get out and wait for the next wave. I trade what I see and this is why my bias changes very easily because it's dependent on what the current wave does.

To see the rest of the article, see the link below.
http://www.forexfactory.com/news.php?do=news&id=90523
  • #1,092
  • Jun 7, 2008 11:30am Jun 7, 2008 11:30am
Quoting zoopy
Need to add this to my journal because I find this article very important and something I'm also coming to grips with. Read below...

One of the most common mistakes non-professionals make in trading is they believe market movement is pre-determined. No matter how easy it looks at times, with the technicals mirroring the fundamentals -- as happened this morning w/ the non-farm payroll and the technical sell signal immediately following in the US stock indices, and the buy trigger in GBPUSD and sell trigger in USDJPY an hour later-- market movements are not predetermined and we never know when a trade will be a nice winner or a small loss. Of course we always use stops, and we should never risk more than 2% of our risk capital, insuring losses are small. So if you ever hear yourself saying "this trade is a lock" lose the cockiness and remember your humility. Nothing is predetermined to the degree that 95% of the population thinks it is.

I found the above paragraph very true and well written. This also validates why I'm trading waves and looking into it with more interest. I use waves to determine the current direction only. I never really know how far the move may go or by how much, but what I do know is that there is a high probability price will go up/down depending on how waves break (keep in mind I'm saying high probability not 100% guaranteed). This is also the reason why I have decided to not hold onto trades to "see how far price can go" because the market can be very unpredictable at times. Instead I take 100 pips profit based on how orders are stacked up at round numbers and once I have my profit, I get out and wait for the next wave. I trade what I see and this is why my bias changes very easily because it's dependent on what the current wave does.

To see the rest of the article, see the link below.
http://www.forexfactory.com/news.php?do=news&id=90523


zoopy,

Interestingly, I was reading that one too. The message is clear: NO ONE KNOWS where the market is going to be in 10 sec, leave alone 10 mins.

Cheers,

Fade
  • #1,093
  • Jun 7, 2008 11:44am Jun 7, 2008 11:44am
Quoting Fadetobla
zoopy,

Interestingly, I was reading that one too. The message is clear: NO ONE KNOWS where the market is going to be in 10 sec, leave alone 10 mins.

Cheers,

Fade
Very true Fade.

That's why I trade on the basic principle of what defines a move up vs a move down. Even though my analysis of waves can have a high probability in determining direction, there HAS to be a point where I will be wrong (this is usually when the trend changes as has happened with the euro on the 4 hour).

ie. for the market to go up, it has to create higher highs/lows (waves up) and the opposite if it's going down.

Waves MUST work because in order for a wave to be created in any market, you have to have buyers/sellers. When one out does the other, that's when you get waves in their favour. These are the waves that I'm interested in and these are the waves I follow. Also known as trend trading
  • #1,094
  • Jun 7, 2008 12:53pm Jun 7, 2008 12:53pm
Hi Zoopy,

Just wanted to say that I love reading your stuff. Keep it coming. Currently working on my style and plan to post some stuff on my thread soon. I know you find your journal very useful, which as I said before is why I decided to start mine,

Yamin
Yamin On Demo until I am sure!!!!
  • #1,095
  • Jun 7, 2008 2:01pm Jun 7, 2008 2:01pm
Quoting yamin151
Hi Zoopy,

Just wanted to say that I love reading your stuff. Keep it coming. Currently working on my style and plan to post some stuff on my thread soon. I know you find your journal very useful, which as I said before is why I decided to start mine,

Yamin
Hi Yamin

Thanks for dropping by. I look forward to following your progress in your journal as well

My journal has been very helpful especially with this recent wave stuff. Remember a few months ago I was using trendlines, 50.0% fib retracement and support on the line chart? What started off as an exercise looks like it's been developed into a full blown method requiring no tools (unless you count the horizontal lines as one although I still don't think it's necessary. More for show and tell purposes).


zoopy
  • #1,096
  • Edited Jun 8, 2008 8:28am Jun 7, 2008 3:55pm | Edited Jun 8, 2008 8:28am
This is just a reminder before I head out...

I may be looking at an alternative to entries which will solve the stops problem. The idea will incorporate round numbers as a "tool" since they contribute to price momentum. This in turn will also allow for much tighter stops. The use of the AH may also be on the horizon. I'll elaborate more on this when I get back.

Stay tuned


Edit: Going to be putting this on hold. Backtested a few scenarios and it does more harm than good for this type of trading.

"If it works, don't break it."
  • #1,097
  • Edited 7:03pm Jun 8, 2008 5:14pm | Edited 7:03pm
May have a wave collapse on usdjpy. If price closes below horizontal line, we have a confirmed break and my bias for this pair will change to down.

Edit: 4 hour period ended. Price is above horizontal line. Bias remains up.
Attached Image (click to enlarge)
Click to Enlarge Name: usdjpy_4hour_collapse.gif Size: 9 KB
  • #1,098
  • Jun 8, 2008 5:24pm Jun 8, 2008 5:24pm
  •  MPP
  • Joined Jun 2007 | Status: Be yourself, everyone else is taken | 2,734 Posts
Close on mine shown by white line, happened over the weekend

Attached Image (click to enlarge)
Click to Enlarge Name: uj.gif Size: 15 KB
  • #1,099
  • Jun 8, 2008 7:21pm Jun 8, 2008 7:21pm
Here's a revised usdjpy 4 hour wave chart. We did not get a confirmed collapse of the current 4 hour wave. Bias for this pair is currently still up. Will be checking up on this in 4 hours time to see what happens.
Attached Image (click to enlarge)
Click to Enlarge Name: usdjpy_4hour.gif Size: 10 KB
  • #1,100
  • Jun 8, 2008 7:25pm Jun 8, 2008 7:25pm
Interesting what's going on here after how gbpchf dropped on Friday. This pair the wave broke to the upside, we had a pullback and looks like we may be headed up. Bias for this pair is still up since we have waves breaking to the upside.

Edit: I'd wait another 4 hours to determine if this pair wants to drop more or not.
Attached Image (click to enlarge)
Click to Enlarge Name: gbpjpy_4hour.gif Size: 9 KB
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